OPG fires 3 executives after auditor says generous salaries push up hydro rates

Photo: The Canadian Press. All rights reserved.

Ontario Auditor General Bonnie Lysyk prepares to deliver the 2013 annual report at the legislature in Toronto on Tuesday, December 10, 2013. Lysyk says salaries, pensions and bonuses at Ontario Power Generation are “significantly more generous” than for comparable positions in the public service, and have a financial impact on the cost of electricity.THE CANADIAN PRESS/Chris Young

TORONTO - Ontario Power Generation fired two vice presidents and its chief financial officer Tuesday after a damning report from the province's auditor general about generous salaries, pensions and bonuses at the government-owned utility.

Compensation packages at OPG are "significantly more generous" than for comparable positions in the civil service, and have a financial impact on the cost of electricity, Auditor General Bonnie Lysyk reported.

"I'm sorry the findings are what they are, but we strongly believe that they will serve as a catalyst for achieving further positive change at OPG," said OPG board of directors chair Jake Epp.

OPG has cut staff by 8.5 per cent, but increased the size of "its highly paid executive and senior management group" by almost 60 per cent since 2005, creating "a top heavy organization," Lysyk said in her annual report.

"Earnings and benefits were significantly more generous at OPG than for comparable positions in the Ontario Public Service, and many of OPG's senior executives earned more than most deputy ministers," she reported.

Incentive awards for OPG's non-unionized staff can be up to $1.3 million, and their top five executives will be eligible for pensions ranging from $180,000 to $760,000 a year.

OPG contributes "disproportionately more" to its pension plan that its employees, added Lysyk, with a funding ratio of 4:1 or 5:1, significantly higher than the 1:1 ratio in the public service.

"OPG is also solely responsible for financing its pension deficit, about $555 million in its latest actuarial valuation," added Lysyk.

It's no wonder our "hydro bills are going through the roof," said Progressive Conservative Leader Tim Hudak.

"As premier, I would reduce the size of OPG. I would make sure that these gold plated giveaway pensions don’t exist," said Hudak.

"Stop these pensions because people that are paying the bills, if they dreamt about that kind of pension they'd wake up and apologize."

The New Democrats said Ontarians are paying the highest electricity rates in Canada because the Liberal government can't control Ontario Power Generation.

"If you want to be a millionaire you don't belong in the public sector," said NDP Leader Andrea Horwath.

"It's respect for public dollars that should be the priority, but we see a total lack of respect for public dollars, not only by the OPG but by the governing Liberals."

Energy Minister Bob Chiarelli said OPG knows the auditor's conclusions are unacceptable.

"The auditor's findings indicate that Ontario can and should expect better, and OPG takes this report as seriously as we do," he said.

In her annual report. the auditor general also found it could cost the government up to $820 million or even more to divest itself of the Ontario Northland Transportation Corporation, which the Liberals listed on the books as savings of $265.9 million.

"The (government) did not include a number of other significant revenues and expenses that would need to be considered in determining any net savings resulting from the divestment of the ONTC," said Lysyk.

Lysyk also found school cafeteria sales plummeted up to 45 per cent since boards implemented healthier food choices, and the boards aren't making sure that the new items are indeed healthier.

"None of the three school boards we visited had reviewed the food and beverages sold in their cafeterias to ensure that the items met nutrition standards," She said. "We identified a number of instances where the products did not comply."

The auditor also found there is no formal monitoring to ensure students in grades 1-though-8 get the required 20 minutes of daily physical activity.

She also reported the Ministry of Education provides "only limited oversight" of 1,000 private schools, which are not required to hire certified teachers, obtain criminal background checks on staff or follow the Ontario curriculum.

"Education officers conduct a brief visit to validate newly registered schools, but there is no process in place to ever visit these schools again," said Lysyk. "The ministry does not evaluate the curriculum for quality or content."

The auditor also found there are still 3.1 million of the old red-and-white health cards in circulation, abut 23 per cent of the total number, 18 years after the government announced they would be eliminated to help reduce fraud.

Additionally, Lysyk reported Ontario quadrupled autism funding over the last decade but there are still more children waiting for government-funded services than there are children receiving them.

The long waiting lists mean Ontario children do not typically start Intensive Behaviour Intervention therapy until almost age seven, when research has shown that children who start IBI before age four have better outcomes than those who start later.

Lysyk also found there is little to no enforcement of regulations on hunting and fishing in provincial parks or on prohibited activities such as commercial timber harvesting and mining.

"Park staff say that illegal hunting, boundary encroachment by landowners, waste dumping and the cutting and removal of trees occur with regularity," said Lysyk. "Assets within provincial parks such as buildings, roads, bridges, drinking water systems and septic systems listed as being in poor or defective condition require more than $590 million to replace."